Cattle futures mostly edged higher Monday with carryover support from last week’s strong close and the bounce higher in wholesale beef prices.
Choice Boxed beef cutout value was $8.09 higher Monday afternoon at $257.02/cwt. Select was $4.42 higher at $225.68/cwt.
Live Cattle futures closed an average of 39¢ higher.
Feeder Cattle futures closed an average of 14¢ higher, except for unchanged to 27¢ lower in three contracts.
Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Monday afternoon, according to the Agricultural Marketing Service.
Last week, live prices were at $153-$155/cwt. in the Texas Panhandle, $155-$156 in Kansas, $156-$158 in Nebraska and $156 in the western Corn Belt. Dressed prices were $246-$247.
The five-area direct weighted average fed steer price last week was 63¢ lower at $155.79/cwt. The average steer price in the beef was $1.73 lower at $246.82.
Corn futures closed 3¢ to 10¢ higher. Reportedly, bargain hunting was a primary driver.
Soybean futures closed 18¢ to 23¢ lower through Sep ‘23, and then mostly 10¢ to 14¢ lower., pressured by positive rains in South America.
******************************
Major U.S. financial indices closed higher Friday, recovering some recent losses. The main driver appeared to be bets on the next CPI indicating a touch lower inflation.
The Dow Jones Industrial Average closed 528 points higher. The S&P 500 closed 56 points higher. The NASDAQ was up 139 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.82 to $2.15 higher through the front six contracts.
******************************
Volatility continues in wholesale beef prices as buyers dust up holiday shopping and prepare for the calendar to turn, with a stronger floor than many would have expected.
For perspective, the precipitous drop in Choice boxed beef cutout values early last week spooked the market. Week to week on Monday, though, it was $13.71 higher at $257.02/cwt., following a decline of $11.22 for the same period a week earlier. Select was $4.57 higher week to week on Monday at $225.68.
Along the way, Andrew P. Griffith, agricultural economist at the University of Tennessee says the Choice-Select spread underscores consumer demand for higher quality beef.
“The Choice-Select spread typically narrows during the winter months when consumers begin using the slow cooker more frequently. The retail to consumer market is not quite to that point, but the wholesale to retail market should be trading for retailers needs during the winter months,” Griffith explains, in his weekly market comments. “Retailers are demonstrating the demand consumers will have for beef grading higher than Select during the winter months. Consumers have determined that a chuck roast that grades Choice is better than one that grades Select. The Choice-Select spread will narrow in January and February, but it is unlikely those spreads will narrow as much as has been seasonally typical the past decade.”